Keith Gill went from YouTube and Reddit fame as the investor who helped inspire the runup in GameStop stock to a star witness in a congressional hearing this morning.
And he did it all from his big, red gamer chair next to a matching microphone on a boom. Gill testified for a House Financial Services Committee hearing that he was not manipulating the price of GameStop stock, just pushing the case as to why it was underpriced for its intrinsic value.
The former MassMutual marketing staffer made his case during his opening statement for the hearing on the GameStop runup that he is a small investor who expressed his big vision for a beloved company.
“The current price of the stock proves that I am right about the company. A few things that I am not: I am not a cat; I am not an institutional investor; I am not a hedge fund,” said Gill, whose YouTube channel name is Roaring Kitty. “I am just an individual whose investment in GameStop and posts in social media were based upon my own research and analysis.”
Gill outlined a background that was in many ways the story of a generation that was thrust into the working world in the 2008 era. He grew up near Boston, the first in his family to graduate from college. He started looking for a job in 2009 and for the next several years worked sporadically, meanwhile getting more interested in the stock market.
After two years of unemployment, he took a job in 2019 at MassMutual, developing financial educational programs for advisors to present to prospects. He and his wife were ecstatic to find a job with benefits, particularly because they recently had a baby.
He was becoming more interested in GameStop by using sound reasoning that a value investor like Warren Buffett would employ. He believed GameStop was underpriced because investors did not see the hidden value in the company.
GameStop was also a bit of a nostalgia play for him and his audience. He remembers going to the store when he was younger, and believed in the brand’s power in the ever-booming world of gaming.
Besides his analytical skill, Gill also brought a performer’s flair to his persona. He appeared in YouTube episodes in a red bandana and wristbands along with mirrored aviators. In the Reddit group WallStreetBets, where Gill went by the name DeepF—ingValue, he and others made the case for the stock (or “stonks” in that venue), and also the power wielded by hedge funds that can cripple a company and its investors by shorting the stock and talking it down.
When the renegade investors started pumping the price of GameStop went from $19.95 on Jan. 12 to $347.51 on Jan. 27, a tough two weeks for short sellers who were squeezed by investors holding the call options.
The rapid runup revealed some deep cracks in the investing world. One was the vulnerability of short-sellers to get caught in a coordinated squeeze (and the deep antipathy toward them), and of cheap trading platforms such as Robinhood. Both organizations ended up needing billions of dollars in support to survive the buying frenzy.
One of the issues the hearing focused on was Robinhood’s limits or refusal to fulfill orders for some stocks, such as GameStop, AMC and the iShares Silver Trust. All were pushed as “meme stocks” on social media.
Democratic members of the committee primarily focused on Robinhood’s actions in the episode, and what they revealed about the firm’s practice. The Securities and Exchange Commission is investigating the block of purchasing.
In another case, Robinhood agreed to pay $65 million to settle SEC charges that the firm failed to tell investors that the company charged other companies to place orders from Robinhood’s customers, also known as paying for order flow. That meant that the Robinhood purchases tended to be a little bit higher, according to the SEC. Democratic members also asked about that case.
Republicans on the committee commented that Robinhood and other platforms were equalizing access for individual investors and that the meme stock episode “self-corrected.”
For Gill and fellow investors, it was the ride of a lifetime. As GameStop climbed, investors broadcast their winnings, exulting in their great fortune to find great fortune. Some talked about erasing debt, paying for college, buying a home and simply being free.
Gill was already a winner when the stock broke $20. He testified about the life change that the episode meant to him and his family.
“The money will go such a long way for us,” Gill said. “We had an incredibly difficult 2020.”
Gill wrapped up his comment with another plug for GameStop.
“As for me, I like the stock,” Gill said as Chairwoman Maxine Waters gaveled the end of his time. “I’m as bullish as I have ever been for the eventual turnaround for GameStop and I remain invested in the company.”
GameStop closed at $40.69 today.
Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at firstname.lastname@example.org.
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